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Former Samoa Airways Minister commends Government for halting loans

By Lagi Keresoma

APIA, SAMOA – 27 JUNE 2023: The former Minister of Samoa Airways under the Human Rights Protection Party Government, Lautafi Fio Purcell has commended the Government’s decision to halt taking out any more loans and work on what they have already.

The two time HRPP Cabinet Minister, was speaking on the 2023/2024 Budget debated in parliament.

When the FAST Government took over 23 months ago, the Governments external debt stood at $1.2 billion and had reached the ceiling of 50% of GDP. So the government stopped taking out new loans and focused on repayments. The debt has since been reduced to $934 million according to the Minister of Finance, Mulipola Anarosa Ale Molio’o’s budget statement.

Despite the drop in the external debt, there was an increase in the internal debt with a major part being the old Samoa Airways debts while Lautafi was the Minister in charge.

While withholding taking any more loans the FAST Government is utilizing grants received from donor partners.

“It is a good initiative and there is no need to borrow money, we have enough to cater for our developments,” Lautafi told parliament.

He however urged the Government not to rely solely on grants.

He referred to the Finance Minister’s budget statement where it says grants are “expected to finance development expenditures.”

The Ministers budget statement noted total cash grant assistance of $165.4 million from donor partners is expected to finance developments for ongoing projects, sector programs and approved investment in all sectors.

“Although we got $165 million from grants in this financial year, but we are not sure whether we get it or not and it is an unpredictable risk we do not want to take,” he said.

Overall, he commended the Minister and Government for all the developments including the $1 million District Development Project.

Anoama’a No 1 MP wanted loans to develop
However Opposition backbencher Alaiasa Sepulona Moefaauo urged the Government not to halt the opportunity to loan from international financial institutions.

He said it is the duty of the Government to develop Samoa and not halt opportunities.

Mulipola took the floor and responded that when the FAST Government took office at the end of July 2021, Samoa’s international debts with financial institutes had exceeded the 50% ceiling.

“We as the Government has different policies and when we took office, the debt ceiling had reached 50% and we need to honour our commitment to pay those loans and its why we stopped taking any more new loans as we need to be prudent in our borrowing and uncontrolled expenses,” Mulipola argued.

Loans a liability for future generations
The Minister for Health, Valasi Togamaga Tafito Selesele reminded Alaiasa and Parliament of the words spoken by a former Government leader in parliament years ago.

Valasi was in the Opposition at the time and his party was very concerned about the country’s level of international debts and who will ultimately pay for those loans.

“The response from government at that time was there are incoming generations who will pay for those loans which means future generations will arrive to face a burden of these unpaid loans,” said Valasi.

MP for Faleata No 4, Ale Vena Ale supported the Government stance to halt loans and said any Government should be cautious of loans.

Lautafi and several MPs also raised concern over cost and speed of internet and mobile service provided by the service providers and suggested the Regulator to look into the matter.

Associate Minister Laumatiamanu Ringo Purcell also questioned the internet speed and coverage of the mobile phones despite their many public and media promotions.